Responding to Online Reviews Can Help Your Business

By Andrew Martins, Writer January 30, 2019 06:26 pm EST

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We've all had a bad day. Things don't always go the way we plan in our everyday lives, and that can often spill into our professional lives. For small business owners, a bad day can end up affecting your customers' experience, leading to one of the more difficult things to deal with in our tech-infused world – a bad online review.

Gone are the days of customers writing reviews solely about individual items. Thanks to platforms like Yelp and TripAdvisor, the average person can share their experience with professional services and local shops with millions of potential customers around the world. That means every good and bad review that makes its way online can affect potential sales.

A 2018 local consumer review survey conducted by BrightLocal showed that approximately 86 percent of consumers read reviews for local businesses. In addition, "80 percent of 18- to 34-year-olds have written online reviews," while 91 percent of that demographic trusts online reviews as much as word-of-mouth.

Since customer reviews live on the internet in perpetuity, it's important for small business owners to try to steer the narrative surrounding their business. That means breaking out your keyboards and responding to critics.

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"By monitoring and responding to reviews, a manager can make sure that when negative reviews come in – as they inevitably will – they can respond constructively and maybe even raise their firm's rating along the way," wrote the authors of a 2018 Harvard Business Review study titled "Replying to Customer Reviews Results in Better Ratings."

According to the HBR study, which "examined tens of thousands of hotel reviews and responses from TripAdvisor," hotels that responded to reviews saw a 12 percent increase in the number of reviews that came in and a marginal increase in their overall rating.

After looking into why that was the case, the authors of the HBR study suggest those better rankings came regardless of whether management was responding to positive or negative feedback. In fact, analysis suggested to the authors that responding to positive reviews "has the same benefits" as responding to negative comments.

These findings, they say, come from people's natural aversion to conflict.

"If the consumer notices a manager responding to past reviews, they might decide not to leave a trivial or unsubstantiated negative review, to avoid a potentially uncomfortable online interaction with the manager," the study's authors wrote. "Even though reviewers don't have to meet the manager in person, an online interaction between the two parties is permanently recorded and available for anyone to read in the future. To avoid situations like this, some consumers might choose not to leave a negative review."

A similar study from the University of Denver's Daniels College of Business found marked impacts on the financial performance of hotels that responded to reviews on TripAdvisor. The research revealed that if a hotel had very few negative reviews, the company's financial performance dropped when company leaders responded to those posts.

The study also found that responding to online comments hurt financial performance when there were a lot of positive reviews. The study's authors said that responding to reviews in this situation can create unnecessary information overload.

"If subsequent consumers have already seen a very strong and clear signal about the quality of products and services from a large group … external disturbance from the completely different source (managers from the firm) would make consumers react to it negatively," the study's authors wrote.

For example, consumers may raise questions in their minds about the soundness of the business, which may lead them to become suspicious about the underlying motives of the response.

Conversely, the research found that if there are only a few positive reviews, responding helps increase revenue.

"Such actions can augment signaling of very positive ratings to potential consumers to accelerate the formation of brand relationship and then deepen customers' trust," the researchers wrote.

In addition, responding to comments when there is an abundance of negative reviews can also improve financial performance, the study found.

"In the backdrop of firms shifting their social media emphasis from passive listening to active intervening, our findings provide important implications for practicing managers," the study's authors wrote. "Using our findings, managers can effectively utilize the efforts and resources required to manage online [reviews] and truly benefit from the wisdom of online crowds."

When it comes to responding to negative online reviews, Ryan Erskine, manager of client services at BrandYourself, wrote on Forbes that business owners should keep the interaction simple and to the point while calmly handling the criticism.

"A little sympathy goes a long way toward defusing the situation," Erskine wrote. "If the reviewer is complaining about bad service, you can still apologize that they had a bad experience without supporting their criticism of your attention to detail."

Responses should also be simple and direct, with some specifics based on the individual customer's problem.

"It's often a good idea to briefly speak to the reviewer's primary concern," Erskine wrote. "Doing so shows that you're paying attention to their review – that you hear them and care enough to tailor your response to their unique situation."

When possible, offering to handle the problem over the phone or in person could show potential consumers that you are willing to iron out any kinks while personally addressing a problem.

Andrew Martins

Andrew Martins is an award-winning journalist with a BA in journalism from Ramapo College of New Jersey. Before joining Business.com and Business News Daily, he wrote for a regional publication and served as the managing editor for six weekly papers that spanned four counties. He is a New Jersey native and a first-generation Portuguese-American, and he has a penchant for the nerdy.